Intel Update

Great news for Intel (INTC) this week.  Microsoft has announced they will give away Windows 8 to phone and tablet manufacturers.  This is huge for them being this was the problem with Windows 8 tablets having a higher selling price than Android and Apple Tablets.  I now believe they will have their chips in more than the original 40 million tablets they projected.  If this happens the damn will finally burst on their share price.  This and I believe they will raise their dividend later this year.  Right now collect the 3.6% yield and wait for the break out to the upside.  This was a down week on wall street yet the shares were up anyway.  That is another positive sign that the stock is ready for a short term upside move.  Thanks for reading and good luck investing.  Tony

Intel

Intel (INTC) has been on the move this week.  It crossed the all important $25 a share level and held above it all week. I take this as a great technical short time sign. You can make money in this one short or long term.  Buy here and collect the 3.6% dividend while you wait.  Good luck investing.  Tony

Intel

Intel has finally broken through the $25 a share level.  I see it testing the $28 level this year.  Don't miss this great opportunity to buy a super blue chip paying almost a 4% dividend!  Buy and hold forever. It works for Warren Buffet!  Good luck investing.  Tony

Intel

Does AMD Stand a Chance Against Intel's Cherry Trail?

By Ashraf Eassa | More Articles
March 13, 2014 | Comments (1)

At Intel's (NASDAQ: INTC  ) investor meeting, CFO Stacy Smith was keen to highlight the cost savings in the low-end PC space in moving from its Bay Trail-M/D products to the Celeron version of its Broxton system-on-chip, which was designed primarily for smartphones and tablets. Indeed, according to the following graphic, the cost reduction from the current-generation Bay Trail-M/D to Broxton, a 2015 product, is on the order of 37%.

(Source: Intel)

What about Cherry Trail?
The above chart has Intel moving from the 22-nanometer Bay Trail to the 14-nanometer Broxton, completely skipping over Cherry Trail, the successor to Bay Trail in tablets, shown in Intel's most recent mobile roadmap.

(Source: Intel)

It's understandable that Intel would skip doing a Cherry Trail-based smartphone chip as the company attempts to accelerate to leadership with Broxton. But it has always been odd that Intel had implied that it would be skipping over Cherry Trail for low-end notebook and desktop PCs. After all, Cherry Trail – from some of the leaked specifications thus far – seems like it would be a more-than-potent successor to Intel's current Bay Trail-M/D lines for low-end notebooks and desktops, respectively. It turns out that the company is indeed bringing out Cherry Trail-M/D.
The evidence is crystal clear
A website known as Zauba allows users to track products that are imported into and exported out of India. In doing a search for anything related to a potential Cherry Trail-M/D part, the following came up:

(Source: Zauba)

It looks as though Intel has every intention of bringing to market a 14-nanometer, Cherry Trail-based line of low-end PC processors. This is great news for Intel and its PC margins, as these chips should be extremely small and cheap to make. Unfortunately, it's not so fantastic news for Intel's weaker rival, Advanced Micro Devices (NYSE: AMD  ) , particularly as Cherry Trail will not just be cheap to make, but will be extremely low-power and feature a significantly overhauled graphics engine.
AMD is stuck
Today, AMD competes at the low end against Intel's Bay Trail-M/D with a part known as Kabini. This is a 28-nanometer SoC based on the Jaguar CPU core and AMD's in-house Radeon graphics IP. While it offers higher graphics performance than Intel's part -- and roughly equivalent CPU performance -- it consumes a lot more power. In addition, Intel is building these chips on 22-nanometer manufacturing plants that have been paid for by the company's Ivy Bridge and Haswell generation of PC processors. AMD, on the other hand, needs to hand the foundry margin over to Taiwan Semiconductor (NYSE: TSM  ) , which impacts its ability to engage in a price war profitably with Intel.
When Intel moves to 14-nanometer, the chipmaker will have roughly a two-generation manufacturing lead. That means Intel will be able to pack far more features into far less of a die area than AMD can at 28nm. Further, Intel's Cherry Trail is likely to neutralize or perhaps even reverse the graphics advantage that AMD currently enjoys, but it will be able to do so in a much tighter power envelope. It's just not a pretty situation for AMD, which makes it difficult to believe in an AMD share-maintenance story, let alone a share-growth story in PCs.
Foolish bottom line
AMD is doing the best it can, but the deck really is stacked against the company. With Intel aggressively fighting with Bay Trail-M/D today and with plans to transition to Cherry Trail-M/D presumably by the holiday season, can AMD's much-hyped Beema/Mullins really stand a chance?

Yet Another Intel Article

Ashraf Eassa

Long/short equity, contrarian, independent research, tech

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Intel An Embarrassment? No.

Mar. 7, 2014 9:10 AM ET  |  58 comments |  About: INTC, Includes: QCOM

Disclosure: I am long INTC. (More...)

Summary

• Intel has been accused of being an embarrassment by noted columnist, Rocco Pendola.
• While mobile execution not great, the article claims Intel's brand is worthless.
• This assertion is flat-out wrong.

When I checked the Intel (INTC) headlines on Yahoo! Finance, I saw a piece titled, "Intel Has Become An Embarrassment" on The Street. I was actually stricken by just how the piece actually failed to substantiate its key bearish arguments against Intel. In particular, I take issue with the following remarks:

If anybody wins at wearables it's not going to be Intel, a company with zero brand cachet with consumers and a legacy that will completely expire if Apple ever takes over the chip slot on its Macbooks.

And, of course,

The more Intel loses, the less it can afford to lose.

Now, let me be perfectly upfront and say that I actually agree with the author that "wearables" will mostly turn out to be a fad, and I further agree that Intel has no business actually selling end-devices to users (since, after all, Intel is a chip company), but the other claims... Well, I humbly offer my rebuttal.

No Brand Cachet?

According to the author, Intel has zero brand cachet with consumers. I mean, after all, Intel only has that cutesy "Intel Inside" logo plastered onto about 80% (and growing) of the Windows PCs on the planet. (Ironically enough, the MacBook/iMac line don't have this branding, so Apple's piddly 16 million computers sold per year wouldn't mean much to Intel should Apple try to have a go at it with its own chips). Oh, and the PC market is only a 300-million unit market today.
Sure, you can argue that the PC market is in perpetual decline (I think the traditional PC market is on the decline, but the rise of convertibles and Intel's foray into tablets will, in time, more than offset this), but what you can't argue with is that according to Interbrand (you know, just one of the world's largest brand consultancies), Intel is the 9th most valuable brand in the world.
Yes, folks. Even though Intel blew it and is no longer the world's largest semiconductor company by market capitalization (that'd be Qualcomm (QCOM)), it still has by far the most powerful brand of any semiconductor company and, as far as technology goes, is only slightly behind Samsung.

Intel Can Afford To Lose On These Hobbies

It's obvious that Intel's executive team collectively blew it when it came to pursuing the mobile market - they underestimated the market and, more importantly, the competition, so I completely agree that the clock is ticking on its mobile strategy. This is doubly true as Intel is not only not seeing a return on its massive ~$4b/year investment in mobile (this is Qualcomm-level, without the Qualcomm revenues), but the PC market (Intel's core business) is in secular decline as far as anybody can tell, so success here is imperative.
I also agree that Intel shouldn't be wasting money on acquisitions of third-rate "wearables" makers like Basis (seriously, go read the Amazon reviews of their products sometime - utterly junk), but $100 million here or there for a company that generates ~$11 billion/year in free cash flow just isn't going to break the bank. If Intel wants to make these acquisitions and potentially learn something about the industries it may want to supply chips into, then why not? All of Intel's failed mobile chips thus far have cost >$100 million each to develop, but the company presumably learned something from those failures.

Conclusion

Does Intel need to pull it together in mobile and start developing leadership products? Of course.
Is the PC market in deep trouble? Depends on your definition of "PC".
Does Intel need to get a pretty significant chunk of the mobile pie in order to offset PC declines? Of course.
But is Intel's brand worthless? Will spending a couple-hundred million to learn about wearables really break the bank? Nope.
Is Intel an embarrassment? Well, do any other chip design houses own their own fabs, generate $50 billion in semiconductor revenue, and have a more valuable brand than Intel?
No.

Intc Positive Post

I just read another positive post over at Seeking Alpha about Intel's Tablet plans.  A year from now when they will have sold over 40 million Tablet chips will will look at this time as the Stock's "Tipping Point".  This will have been a great time to but and hold INTC for the long haul.  In March of 2015 I will be posing about what a great year it was to be holding Intel's stock.  After cashing my 4% dividend payments and seeing a 50% price rise in the stock.  Good luck investing.  Tony

Alcatel-Lucent (ALU)

Ayush Singh

Growth, long-term horizon, momentum, tech

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Is Alcatel-Lucent Pegged For Another Excellent Year?

Feb. 18, 2014 7:20 AM ET  |  About: ALU, Includes: QCOM

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)

Executive summary:

• Return to profitability indicates that the "Shift Plan" is working.
• Partnership with Qualcomm to launch multimode cells in 2014 will benefit Alcatel in the coming years.
• Continued divestment will improve Alcatel's overall financial outlook, helping it to sustain profitability in the long-run.
• Despite the heroics of 2013, Alcatel is cheaper than its peers and has more room to grow.
• A great buy at present valuations.

__________________________
Everyone loves comebacks. Betting on the turnaround of a company can prove to be very lucrative for investors and over the last few years, tech investors have witnessed a number of impressive turnarounds. 2013 was a good year for many struggling companies like Nokia (NOK) and Hewlett-Packard (HPQ); however, French-American communications giant Alcatel-Lucent (ALU) was the center of attention. Shares of Alcatel-Lucent appreciated over 300% in 2013 owing to the long-awaited rebound in the telecommunication equipment industry. And I expect the company to continue its bull run in 2014 due several factors which I have discussed below.

"Shift Plan" Is Working

Alcatel-Lucent is headed in the right direction under the leadership of new CEO Michel Combes. Combes' bold Shift Plan, which includes vigorous cost saving initiatives like diversification and overhead reduction, seems to be working out perfectly. This is evident by the fact that Alcatel-Lucent delivered its first quarterly profit in two years earlier this month. For the reported quarter, Alcatel's adjusted earnings came in at $0.08 per share, which was well above the consensus estimate of negative $0.01. Gross margin for the quarter was also up 400 basis points to 34.3%, while free cash flow improved $164.5 million.
However, on the revenue front, Alcatel fell short of the consensus estimate $5.7 billion by $300 million. The main question is, with top-line growth being non-existent; will Alcatel be able to continue its bullish run in 2014? I think it can and here's why.

Deal With Qualcomm Will Benefit Alcatel

Alcatel announced a partnership with Qualcomm (QCOM) to develop multimode cells in July 2013. The multimode cells that combine Alcatel's lightRadio radio access network (RAN) with Qualcomm's small cell chips are expected to hit the market by mid-2014. The two companies expect to launch small cells with improved wireless network reception in environments such as urban areas, shopping malls and other enterprise venues. Mike Schabel, VP of Alcatel-Lucent's small cell department, declared that all of Alcatel's small cells will have integrated Wi-Fi going forward.
As of now, site acquisition, and delivery of backhaul are the primary factors restricting the wide-scale deployment of small cells. However, Alcatel aims to steer clear of these roadblocks by a site certification program that brings together a variety of partners.
As of January, Alcatel has 65 contracted, revenue-generating customers in 42 countries. The soaring sales of smart devices have led to an increase in demand for data usage and rollout of small cell base stations is expected to boost network speed, help operators speed installation of the vendors' metro cells, and reduce overheads for the company.

Source: LightReading.com
Schnabel said Alcatel-Lucent now has a database of 600,000 qualified sites across the United States and Western Europe that are available for small cell deployment and as per a report from the Small Cell Forum; this number could rise to nearly 11.5 million by 2018. Thus, the company is well set to benefit from this deal.

Continued Divestment

Presently, revenue growth is not a part of Alcatel's plan as the company is more focused on streamlining its business. Combes promised the sales of non-profitable assets worth €1 billion and a €1 billion reduction in overheads by 2015 as a part of his Shift Plan. The positive effects of Shift Plan are visible in the company's quarterly report as the company's operating income and gross margin jumped 167% and 4%, respectively.
The company is also in talks to sell 85% stake in its enterprise unit to China Huaxin in a deal worth $362 million. The sale, which is due to be completed before the end of the second quarter, would be the second disposal administered by Combes. The continued divestment will not only help Alcatel to boost its gross margin and operating income, but is also important to enhance the company's overall financial outlook. As you know, Alcatel is a highly leveraged company with total debt/equity ratio of over 168. Consequently, in some quarters, the company fails to generate enough cash to keep up with the interest expenses. Thus, the divestments and overhead reduction is important as it will help Alcatel to pay off debts and transform it into a company that can be sustainably profitable over the long term.

Why Buy

Despite having a stellar year, Alcatel has more room to grow than peers like Nokia and Ericsson. For the reported quarter, Alcatel's operating margin jumped 5% to 7.8%, however, it's still less than Nokia and Ericsson, which reported operating margins of 11.2% and 10.3%, respectively. Going forward, the disposal of Enterprise business will further improve Alcatel's operating margins. And given that it has the least operating margin amongst its peers; it is highly likely that it will outperform them in 2014 as well. Moreover, with a price/sales ratio of 0.51 Alcatel is cheapest of the lot; therefore I think investors should buy it before it gets pricey.

I couldn't give the case for ALU better so I cut and pasted this from Seeking Alpha.  I have been long ALU for a few years, starting getting in around $1.20 a share.  Good luck investing.  Tony